- Date : 05/03/2021
- Read: 4 mins
Ageing can be hard. However, women need to pay attention to the costs of growing older.
In 1950, life expectancy in India was 35. This has doubled to 70 by 2021. As women age, their needs and wants also change. Life’s necessities in one’s 50s and 60s are not the same as they were in one’s 20s and 30s. This is why financial planning is critical. And since women tend to live longer than men, it’s even more relevant. Financial planning can help women cover the costs of healthcare and retirement, and plan their estate and investments more efficiently. This article talks about the costs women have to pay for growing older, and how they can cover these expenses with prior planning.
According to statistics, a male retiring at the age of 60 may have another 17 years of retirement to look forward to. For women, this is 19 years. This, of course, is an estimate; retirees may live longer depending on factors like their family’s history of illnesses, current health, etc. But it highlights the need to save optimally. A 2019 report by Standard Chartered Bank said the average wealth expectancy with enough disposable income to save and invest is Rs 3.6 crore. To amass such a large amount, one has to start saving as early as they can in their career. Retirement is often a neglected aspect by women as many do not work consistently through their life. Even today, many women end up quitting their job due to marriage, childbirth, etc. This can impact their retirement savings.
Health deteriorates with time. The need for – and dependency on – medications, hospitals, and treatments rise with age. Unfortunately, so do the bills. This calls for the need to buy a health insurance plan that can cover these costs. A health plan is crucial for women as they can be affected by ovarian cancer, breast cancer, polycystic ovarian disease (PCOD/PCOS), and pregnancy-related issues. All of these can result in high costs, so a health plan becomes a necessity. In fact, it may be advised to purchase a health insurance policy early in life as the premiums are considerably lower for younger people. This can help save a significant amount of money in the long run.
Creating a will is as important for women as it is for men. Income accounts, retirement accounts, jewellery, real estate, etc. all form a part of the estate plan. If there are multiple children, the will must clearly state how each asset should be divided among them. Do not forget to revisit your will regularly. The names of the beneficiaries on life insurance plans, salary accounts, etc. should match with those mentioned in the will to avoid any disputes later. Women should make it a point to know about their inheritance rights, as these could differ according to their religion.
Investments can be an excellent way to grow wealth. The money that comes from a salary is limited and has little scope of growth if parked in a bank account. This reduces its value when faced with inflation. However, there are investment options such as a Public Provident Fund (PPF), National Pension Scheme (NPS), Equity Linked Savings Scheme (ELSS), etc. that can help women save their money systematically and benefit from the power of compounding. Investing in the stock market, commodity market, currencies, etc. are some other ways that can bring in high returns. Some of these may involve high risk, but the rewards can also be greater if one invests at the right time. Investments can also make for a great strategy to save on taxes as most of these options offer tax deductions under Section 80C of the Income Tax Act (1961).
Growing old can involve unprecedented expenses, but proper planning and execution early in life can help cover these costs. A financial expert can also be of assistance here, as they can suggest to women the right investment options based on their age, stage of life, and personal and professional commitments. Do you know why women face more health issues than men as they age?